Iain Duncan Smith responds to open letter from Catholics on welfare reform

On 3rd July 2015, a group of leading Catholics published an open letter to Iain Duncan Smith calling on him to change his approach to welfare reform. We are delighted the Minister has taken the time to respond to the letter, and publish it in full below.

Department of Work and Pensions,
Caxton House,
Tothill Street,
London,
SW1H 9NA
14th July 2015.

Dear Ms Moffatt et al,

Thank you for your letter dated 3rd July. I welcome your engagement with the vital issue of social justice. It might be helpful to bring to your attention the principles behind the measures announced at the July 8th Budget and also some of the latest evidence around the impacts of our reforms.

The Chancellor recently announced a services of measures to reduce welfare spending, and the 4 principles that have underpinned his decision making. Firstly, the welfare system should support the elderly, vulnerable and disabled people; secondly, those who can work should be expected to look for work, and take work when it is offered; thirdly, the working-age benefit system has to be more sustainable and fourthly, the system shouldn't support lifestyles or rents not available to the taxpayers who pay for that system.

Based on the above principles he announced a number of protections for the most vulnerable in our society: exempting disability benefits and Carer's Allowance from the Working-age Benefits freeze; maintaining the state pension triple lock; exempting the most vulnerable disabled people from the Benefit Cap; and exempting the disabled/severely disabled child elements in Child Tax Credits (and their Universal Credit equivalent) from the Tax Credits/Universal
Credit payment limits. These exemptions show that safeguarding the vulnerable is at the very heart of our reforms.

With regards to sanctions let me be clear that there is no evidence to suggest that sanctions have caused claimants' health to deteriorate. There is however evidence to show that sanctions are changing attitudes towards gaining employment - over 70% of JSA claimants and over 60% of ESA claimants have said themselves that the possibility of being sanctioned makes them more likely to engage in the job finding process. Benefit sanctions have been part of the system for at least the last four decades; however they are only applied as a last resort. Needless to say, we ensure the most vulnerable are protected, and no-one is sanctioned without first being made aware of hardship payments.

The department, as we always have, will continue to support disabled and vulnerable people, providing a strong welfare safety net for those in need. We spent £50 billion on disability benefits and services in 2012/13. We increased spending on the main disability benefits by over £2 billion over the last parliament, and we will be spending more on the main disability benefits in 2020 than we were in 2010.

With regard to Personal Independence Payment (PIP), this was introduced to ensure that support goes to those who most need it and has already resulted in more people receiving the top rate of benefit than did on Disability Living Allowance (DLA). Ipublically recognised that the delays faced by some PIP claimants last year were unacceptable and drove significantly improved performance. The average time a claimant waits for a PIP assessment is now 5 weeks for new claims, and 4 weeks for reassessments of existing claims.

You also discuss Employment and Support Allowance (ESA) and the Work Capability Assessment (WCA). We have already made considerable improvements to the WCA process, including accepting over 100 recommendations from 5 independent reviews and terminating the failing contract with ATOS.

At the Budget, we announced that we would align the ESA Work Related Activity Group (WAAG) rate with that of Jobseeker's Allowance for new claims, alongside a package of measures to increase health and employment support for ESA claimants. This is because it is important not to write disabled people off to a life on benefits. Many can work, want to work, and need our support to get them into work. More and more disabled people are successfully making the transition into work, with latest figures showing that the number of disabled people in work is up by 238,000 on the year.

The benefit cap strikes a balance between incentivising work, fairness for working households and supporting the most vulnerable. In order to protect the most vulnerable, we have however ensured that the cap does not apply to any household where someone receives DLA or is in the Support Group of ESA. Where the cap does apply, households were 41% more likely to go into work after a year than similarly uncapped households just below the cap level, illustrating how the policy incentivises work. Very few capped households have moved and there has not been large scale moves out of London.

There is a clear rationale for this Government's welfare reforms.The system we inherited from Labour was uncontrolled and unaffordable. It wrote-off people with a disability to a life on benefits, and it made welfare a more attractive option than work for millions of people. Our welfare reforms are restoring fairness, simplifying the benefit system, and helping people into lasting employment. Employment is up nearly 2 million since 2010, and 800,000 fewer people are in relative low income than in 2010 -clear signs that these reforms are working.

Last week we announced a new National Living Wage. This will be set at £7.20 an hour from next April and will rise to £9 by 2020. This will benefit over 2 million workers. By 2020 a full time worker on the national minimum wage will earn over £5,200 more by 2020. I am sure you share in my delight at this announcement, which will see millions of workers earn more through work.

The Rt Hon lain Duncan Smith MP

SECRETARY OF STATE FOR WORK AND PENSIONS

Whilst we welcome the Minister's willingness to engage in constructive dialogue, we feel this letter misses the point of the damage that welfare reform causes. We have therefore sent him the following reply this morning. We await his response.